My mortgage company paid my taxes, how do I deduct?

I was behind in my county taxes and my mortgage co. paid them (18K) in October of 2011, I repaid them (monthly, for a year) in 2012. But, according to my 1098's, the taxes were paid during a year I didn't make a whole lot. The next year I made enough to pay them back, but how can I deduct?

I know that there are penalties to pay for being behind in my bills, but I hadn't expected a tax deduction issue to be involved.
Thanks for your help.

2013-02-09T13:49:59Z

Bostonian, I'm afraid that your answer is the correct one. So, it doesn't matter when the money came out of my income, the only thing that matters is what the 1098 states?
Sadly, I won't receive any benefit by amending my 2011 return, and I will not be able to take the deduction I need for all the money I made (and paid to the mortgage co.) in 2012.
Live and learn.

Charles2013-02-09T12:21:26Z

Favorite Answer

If I understand correctly your mortgage company paid your real estate taxes in 2011 and had you pay them back for the expense. The payback was complete in 2012. You didn't claim the deduction for real estate tax in 2011.

You can file an amended return for 2011 to get the credit for the taxes paid. Did you itemize for 2011? If not, add up all your itemized deductions and see what it gets you. If the itemized deductions exceed your standard deduction it may be worthwhile.

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Bostonian In MO2013-02-09T21:33:06Z

You get the deduction in the year that you paid the taxes or that they were paid on your behalf. That would be 2011 from what you describe. If your 2011 income was too low to get any benefit from deducting them, you lose the deduction. If you can get any tax benefit in 2011, you must amend your 2011 return to pick it up that way.

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Max Hoopla2013-02-09T19:58:44Z

You paid them with money you borrowed from your mortgage company. You are paying the loan back.

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